Snapchat Inc. reports total tax expense of $2,547 thousands on its income statement for year ended December 31, 2018, and paid cash of $3,958 thousand for taxes and decreased taxes payable by $755 thousand. The tax footnote in the company's 10-K filing reports the following deferred tax assets and liabilities information.

The domestic and foreign components of pre-tax loss were as follows:

Year Ended December 31 ($ thousands)	2017	2018
Domestic	$(969,922)	$(3,027,580)
Foreign	(283,442)	(435,828)
Loss before income taxes	$(1,253,364)	$(3,463,408)

The significant components of net deferred tax balances were as follows:

December 31 ($ thousands)	2017	2018
Deferred tax assets
Accrued expenses	$10,534	$21,056
Deferred revenue	2,142	976
Intangible assets	140,771	140,494
Stock-based compensation	396,604	254,255
Net operating losses	473,110	849,224
Tax credit carryforwards	124,078	235,300
Property and equipment	--	203
Other	2,015	322
Total deferred tax assets	$1,149,254	$1,501,830
Deferred tax liability
Property and equipment	(5,883)	--
Total deferred tax liabilities	(5,883)	--
Total net deferred tax assets before valuation allowance	1,143,371	1,501,830
Valuation allowance	(1,144,543)	(1,502,346)
Net deferred taxes	$(1,172)	$(516)

Snapchat's gross deferred tax assets increased in 2018. By what amount did Snapchat's gross deferred tax assets increase? $Answer (thousands).

Explain how the valuation allowance affected 2018 net income.

Snapchat's valuation allowance account increased during the year, which means net income increased.

Snapchat's valuation allowance account decreased during the year, which means net income increased.

Snapchat's valuation allowance account increased during the year, which means net income decreased.

Snapchat's valuation allowance account decreased during the year, which means net income decreased.

Use the financial statement effects template to record income tax expense for fiscal year 2018 along with the changes in both deferred tax assets and liabilities and the valuation allowance. Use negative signs with answers, when appropriate.

	Balance Sheet
Transaction	Cash Asset	+	Noncash Assets	=	Liabilities	+	Contributed Capital	+	Earned Capital
Record tax expense & changes in accounts	Answer		Answer		Answer		Answer		Answer

Income Statement
Revenue	-	Expenses	=	Net Income
Answer		Answer		Answer